Which exchange rate do I use for VAT?

The wider picture

The key points from the guide this answer comes from:

1. Being paid in USDC or USDT doesn't change the VAT on what you sell. VAT is due in the normal way on the goods or services, and no VAT is due on the stablecoin itself.
2. In the UK, HMRC says the taxable amount is the sterling value of the tokens at the point the transaction takes place. In the EU, amounts in another currency are converted at the rate rules of the VAT Directive.
3. Converting stablecoins into pounds, euros or other tokens is exempt from VAT as a financial service, following the EU Court of Justice's Hedqvist judgment and HMRC's guidance.
4. Invoice in your normal currency, record the rate you used and the transaction hash, and keep evidence of who and where your customer is: HMRC's October 2026 guidance stresses that blockchain records don't show this.

More questions on this

• Do I charge VAT if a customer pays in USDC?
• Is VAT due when I convert USDC to euros?
• Is this different for stablecoins and bitcoin?

The full guide

Charge VAT on what you sell exactly as for a bank transfer: the stablecoin is the payment, and no VAT is due on the token itself. In the UK the value is the sterling value at the time of the transaction; record the rate you used and the transaction hash.

Read VAT when you're paid in USDC or USDT: value, exchange rates and records, with its sources.

General information, not legal, tax or financial advice. Rules and providers' terms change; check the sources in the guide and take advice on your own situation.